What Capitalists Don’t Get About Socialism

But Pitting One System Against the Other Is the Wrong Way to Look at the Economy

The 2020 presidential election has spawned a strange discussion about whether capitalism is dead or dying, and about whether “socialism” is yet a worse fit for the United States.

Basically more conservative politicians are trashing the Scandinavian-like desires of more liberal Democrats, leaving all in between scratching the heads about why the choices are greed or taxation.

In large part, the unusual discussion is strange because it is a false set of choices and in part because like so much else this is just another convenient way to run down a political opponent. It feels much like a first-world word-definition problem rather than a guide to setting acceptable national economic policy.

To conservatives, waving a “socialism” flag every time Rep. Alexandria Ocasio-Cortez (D-N.Y.) or others mention climate disruption seems a sage warning about dissembling the American economic system, the pride of rugged individualism and the removal of all incentives for hard work.

If you hope yourself to be rich one day, you support capitalism. If you think we should have affordable health insurance, you take the other side.

To AOC, Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) and New York City Mayor Bill DeBlasio and other progressive Democrats, the term “socialism” simply means having a heart for helping others, a short-hand for saying that capitalism has spurred unwarranted greed and meanness against those at the bottom of the inevitable food chain our economy creates.

Weirdly, it has become a standard question for journalists, pundits and voters to ask the Democratic candidates whether they support “socialism” or “capitalism.” Every time I hear the question, I cringe, because people are neither prepared to enter into a discussion about economic systems nor are they really interested in the answer. A yes or no here merely underscores the listener’s standing bias about what the terms mean and who will benefit most from a response.

If you hope yourself to be rich one day, you support capitalism under this one-word debate. If you think we should have affordable health insurance, you take the other side in the debate.

A Mixed Economy

The fact is that for at least a century, America has been a mixture of economic systems, favoring an American Dream that allows individuals with special drive to create an Apple company or an industrialized car industry or an economic system in which richer people become yet richer by moving around pieces of paper that represent financing of others’ work products.

But along the way, we’ve had a labor movement that brought the end of child labor, demanded pay for work hours, overtime and pensions. We’ve had civil rights movements that have asked for more inclusion of protections for women, non-whites and in recent decades for gays and transsexual people. We’ve had—and now are undoing—an environmental revolution in which we have tried to equate the values of clean air and water with profit. We’ve coped with an increasingly multi-national corporate world in which the traditional “individualism” arguments simply don’t apply because we Americans are not in full control of the factors that govern the direction of the economy.

So, instead, we have settled around terms for the economy that simply declare team membership that we represent in political parties or sub-parties rather than in differently colored tee-shirts.

For decades, Democrats and Republicans have hailed America’s business elite, especially in Silicon Valley, as the country’s salvation, argued a recent piece in The Washington Post. “The government might be gridlocked, the electorate angry and divided, but America’s innovators seemed to promise a relatively pain-free way out of the mess. Their companies produced an endless series of products that kept the U.S. economy churning and its gross domestic product climbing. Their philanthropic efforts were aimed at fixing some of the country’s most vexing problems. Government’s role was to stay out of the way. Now that consensus is shattering. For the first time in decades, capitalism’s future is a subject of debate among presidential hopefuls and a source of growing angst for America’s business elite. In places such as Silicon Valley, the slopes of Davos, Switzerland, and the halls of Harvard Business School, there is a sense that the kind of capitalism that once made America an economic envy is responsible for the growing inequality and anger that is tearing the country apart.”

Everyone Wants the ‘Dream’

A writer named Umair Haque has written several pieces in Medium that note that Americans want the Dream, but are upset by “many ills (that come) with it. It makes people immoral, foolish, vain, short-sighted, selfish. It leads to strife and division and greed. But it’s worth it. Why? Because in the end, we all get rich. In fact, it’s the only way that we all get rich in the end — and not end up poor. And being poor brings worse things with it.”

Of course, as he notes, for an astonishing number of Americans, they don’t get rich, though corporations and those already wealthy do. Business Insider Magazine argues that more than half the country have a negative net worth.

In other words, that expectation that we will all get rich is an elusive truth. It’s possible, but not likely.

Instead, what is not only likely but increasingly certain is that basics of housing, food, prescription drugs and health care, clothing, transportation and work itself are all pulling in the wrong directions. Jobs that pay enough for us to comfortably afford our lives are more difficult to come by, and prices for all those basic needs are increasing and quickly.

The exigencies of climate disruption and increased automation clearly are only going to make all this worse; climate change is going to create price and supply wars, and spawn massive migrations; automated robots will eliminate wide swaths of jobs in the name of profit.

Our salaries have been held to minimal improvements for nearly 50 years as the wealthy continue to get wealthier. The income gap is galloping ahead unchecked.

The Democratic candidates or Congress members calling for adjustments are not throwing capitalism out the window. They are saying that we need an infusion of caring, of what they see as fairness and inclusion, of a bit of a stabilizing role for government.

A lot of this comes down to our national views on taxes—the money to fuel government. If you are a “capitalist,” you want to pay as little tax as possible, because it will only be shared through services with those who are not pulling as hard on the oars as you do. If you are a “socialist” or “democratic socialist,” you want to tax the rich to pay their fair share, exactly to help lessen this income gap.

I have no problem with disagreement over these issues, but it seems that Americans prefer to wave hats and banners for their teams rather than look at the reasoning.